eXp World Holdings' Q3 2025 Earnings Call: Contradictions Emerge on G&A Expenses, International Agent Count, AI Integration, Agent Retention, and Global Expansion Strategies

Date of Call: None provided

Financials Results

• Revenue: $1.3 billion, up 7% YOY
• Gross Margin: GAAP 6.5%, down 57 bps YOY; non-GAAP 10.9%

Business Commentary:

* Agent Growth and Productivity: - eXp Realty marked its second consecutive quarter of agent growth, with a 5% year-over-year increase in agent productivity (sales transactions per agent). - The increase in productivity is attributed to the company's strategies to attract and retain agents, as well as the effectiveness of programs like eXp University and the FastCAP initiative.

• International Expansion:
• eXp International surpassed $100 million in revenue for the first time in a calendar year, driven by a 44% increase in real estate transactions year-over-year.

• This growth is primarily due to the company's focus on expanding into new markets with productive agents and streamlined international launch playbooks.

• Innovation and Agent Empowerment:

• eXp introduced new tools and technologies such as FastATTRACT and AI accelerator programs, with 138 agents benefiting from the FastATTRACT pilot.

• These programs are designed to empower agents with innovative skills and resources to build revenue share lines, enhancing their ability to succeed in a competitive market.

• Operational Efficiency and Cost Management:

• eXp reduced its G&A expenses to $82 million in Q3, a significant decrease from previous quarters.
• The reduction is primarily due to investments in AI and automation, which streamlined operations and reduced SaaS costs.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted growth and efficiency: "We generated $1.3 billion in the third quarter, up 7%"; agent productivity improved 5.4% YOY; International crossed $100M revenue YTD; adjusted EBITDA positive at $17.7M; CFO noted a new G&A base of ~$82M driven by back-office streamlining and AI. These emphasize expansion and improving unit economics.

Q&A:

• Question from Thomas White (D.A. Davidson): First on OpEx. You called out that sizable step down in G&A... what were the top 2-3 things that affected that decline and how sustainable is this new level? Any one-time items? And a quick follow-up.
  Response: CFO: Q3 G&A reflects a new base (~$82M) with no accruals/one-offs; declines driven mainly by streamlined back-office operations and AI/automation (reducing SaaS and manual costs); company may invest opportunistically but expects to keep driving unit-economy improvements.

• Question from Thomas White (D.A. Davidson): On agent count and Teams growth — is Teams growth concentrated in particular regions or coming from specific competitors; what could turbocharge Teams attraction (economics, tech, features)?
  Response: CEO (Leo): Teams growth is broad across legacy, independents and high-producing teams; eXp attracts mega teams via eXp University, scale-enabled tools (Canva, CRM, internal tech), human-capital support and favorable economics, with top 250 teams up >15% YoY driving disproportionate revenue gains.

• Question from Stephen Sheldon (William Blair): Update on leveraging automation to reduce transaction processing costs and where the biggest opportunities remain?
  Response: CFO: Unit cost per transaction fell from roughly $620 in Q2 to $523 in Q3; primary opportunities are Doc AI and document/contract automation; realized ~ $7M annualized run-rate improvement from Q2–Q3 and see further runway into 2026.

• Question from Audience (Live): eXp won best use of AI by a brokerage — what examples show how AI removes drag from redundant tasks for agents?
  Response: Founder/CEO: Built in-house AI tools for early contract review, signature checks and transaction management; launched an AI-built Connect hub and AI coach; international rolled out agent microsites and integrations (WhatsApp, listings) to centralize workflows and reduce friction.

Contradiction Point 1

G&A Expenses and Sustainability

It involves the sustainability of G&A expense levels, which impacts financial forecasts and operational efficiency.

What caused the significant decrease in G&A expenses, and is this level sustainable? - Thomas White(D.A. Davidson)

20251107-2025 Q3: The decline in G&A is due to back-office streamlining and AI offsetting SaaS costs. The new base G&A is sustainable, with no accrued expenses. - Jesse Hill(CFO)

Why did operating expenses increase 20% in the quarter? - Tom White(D.A. Davidson)

2025Q2: There were approximately $6 million in one-time expenses related to strategic investments and operations. We expect favorable operating expenses and improved unit economics in the second half of the year. - Jesse Hill(CFO)

Contradiction Point 2

International Agent Count and Growth Strategy

It involves differing statements about the international agent count and growth strategy, which could impact international expansion and market positioning.

Can you comment on the NAR numbers this week and the U.S. housing market? - Thomas White(D.A. Davidson)

20251107-2025 Q3: International agents are now approximately 8% of our total agent count. - Leo Pareja(CEO)

What is the current international agent count and the strategy to reach 50,000 agents by 2030? - Matthew Filek(William Blair)

2025Q2: International agent count is around 5,000. - Leo Pareja(CEO)

Contradiction Point 3

AI Integration and Impact on Operations

It involves the company's integration of AI and how it impacts operational efficiency, which is essential for cost savings and growth.

Can you provide an update on progress in automation to reduce transaction costs? - Stephen Sheldon (William Blair)

20251107-2025 Q3: eXp has made significant progress in automating transaction processing using tools like Doc AI, reducing direct costs by over $100 per transaction. - Jesse Hill(CFO of eXp World Holdings)

How is eXp currently using AI, and what will its future AI-enabled platform look like? - Denise Garcia (eXp World Holdings)

2025Q1: We've been leveraging AI for about two years now, enhancing our capabilities globally. We're building tech stacks with non-technical teams, reducing time and cost and ensuring tools are user-friendly. - Glenn Sanford(Founder, Chairman and CEO)

Contradiction Point 4

Agent Attrition and Retention Strategies

It involves the company's approach to retaining productive agents, particularly those on teams, which directly impacts the stability and growth of the agent workforce.

How does eXp differ from traditional brokerages in the newly added countries? - Denise Garcia (Investor Relations)

20251107-2025 Q3: We're focused on retaining productive agents, especially those on teams. - Leo Pareja(CEO of eXp Realty)

Leo, can you elaborate on the agent count trends mentioned by Jesse this quarter? - Denise Garcia (eXp World Holdings)

2025Q1: We're seeing increases in agent productivity and revenue. Our strategy to attract productive agents is paying off. - Leo Pareja(CEO of eXp Realty)

Contradiction Point 5

International Expansion Strategy

It involves differing perspectives on the timeline and expectations for international expansion, which could have significant implications for the company's growth strategy and investor expectations.

How is eXp different from traditional brokerages in the recently added countries? - Denise Garcia

20251107-2025 Q3: We do believe that international is going to be one of the best growth opportunities for us moving forward. And the thing that I think is different this time is that we've taken a much different approach. We've looked at the countries that we want to enter and we say, 'What are the hurdles? How can we overcome them?' - Glennn Sanford(CEO)

What differentiates international markets from domestic U.S. and Canada? - Denise Garcia

2024Q4: International real estate is similar to how U.S. and Canada were 30 to 40 years ago, without the benefits of the MLS. eXp is bringing a professionalizing influence globally. There's a significant focus on international expansion, with plans to open countries like Egypt, Turkey, and Peru. The strategy is akin to 'Moneyball,' ensuring the best personnel is in place. International is expected to drive future growth. - Glennn Sanford(CEO)